There's strong support among business professionals and the Australian public for companies to be required to disclose all material business risks, according to CPA Australia's Confidence in Corporate Reporting 2007.

The survey asked Australians – including shareholders, business leaders, auditors and fund managers – whether they agreed with a list of statements on the topic of corporate governance.

While the majority of the statements are part of the revised ASX Corporate Governance Principles and Recommendations, the statement on requiring companies to disclose all material business risks is not.

Under the revised principles and recommendations, companies are only required to disclose how they intend to manage material business risks. 

CPA Australia Chief Executive Officer Geoff Rankin said that the findings indicate that there is strong support for ethical and responsible decision-making among business professionals and the community.

'What's interesting about this finding is that support for increased disclosure is across the board. It’s not just the Australian public who think this is a good thing, it’s also business leaders, finance professionals, fund managers and auditors,' Mr Rankin said.

'We believe that this finding might signal a momentum towards increased reporting in this area.'  

The survey results also revealed fluctuating confidence levels, with members of the public less confident in the integrity of business leaders than were auditors and other finance professionals.

Forty-four per cent of those surveyed said their confidence in company directors was 'quite high', while one-third expressed ambivalence and a further 14 per cent said their confidence in directors’ integrity was low.

When asked about their confidence in Australian corporations compared with a year ago, 23 per cent said it had increased (compared with a six per cent increase for the same question in 2006).

There was a significant expression of increased confidence in the performance of personal superannuation and personal investments, while 38 per cent of all those surveyed said their confidence in overseas share markets had fallen. This was particularly pronounced among fund managers, with 57 per cent saying their confidence in overseas share markets had decreased.

Mr Rankin said the survey results provided a firm basis for ongoing debate on what would continue to be challenging issues for business, government and the public.

He said the support base for major corporations was encouraging, but efforts in recent years to further improve standards in Australian industry could have led to greater confidence levels.

'The results show that corporate Australia still has a way to go in rebuilding public confidence,' he said.

'It seems some people are yet to be convinced about the effectiveness of new measures designed to address these issues.'

Background to survey

CPA Australia's sixth annual Confidence in Corporate Reporting 2007 survey was conducted during October and November and surveyed 300 members of the public, as well as 200 directors / CEOs / CFOs, 150 financial analysts, advisers and stockbrokers, 100 auditors and 44 institutional investors and fund managers.

The 2007 survey captured their perceptions in three broad areas:

• confidence in Australian corporations, local and overseas share markets, superannuation and investments
• confidence in the integrity of Australian business leaders
• the impact of environmental reputation on decision-making

The survey was commissioned by CPA Australia and undertaken by independent research organisation Di Marzio Research.

A copy of CPA Australia's Confidence in Corporate Reporting 2007 is available from the publications section of the website.

Media enquiries